Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (May 20, 2016)

USD

The US dollar seemed tired from its climb as it barely scored gains after some FOMC members reiterated their hawkish stance. Policymakers Fischer and Dudley acknowledged the green shoots in the economy and suggested that the next meeting could still have the possibility of a rate hike. Data from the US came in mixed, with initial jobless claims meeting expectations and the Philly Fed index slumping from -1.6 to -1.8 instead of improving to 3.2.

EUR

The euro had a mixed performance as the lack of top-tier data left it sensitive to country-specific events. Only the German PPI and euro zone current account balance are up for release today. Analysts are expecting to see a 0.2% uptick in German producer prices and a wider current account surplus of 19.6 billion EUR from the earlier 19.0 billion EUR.

GBP

The pound extended its gains thanks to stronger than expected UK retail sales. Consumer spending rose 1.3% in April versus expectations of a 0.6% rebound while the previous reading was revised to show a smaller decline of 0.5%.

CHF

The franc continued to weaken against its forex peers as there were no major reports out of Switzerland. There are still no reports lined up from the Swiss economy today so a continuation of the current market sentiment could mean more losses for the franc.

JPY

The yen lost ground to most of its peers when risk appetite improved. There were no major reports out of Japan yesterday, although data released earlier in the week came in mostly better than expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to retreat despite the pickup in risk-taking, as the Aussie fell despite stronger than expected headline jobs data. Employment rose 10.8K versus the estimated 12.6K figure while the unemployment rate fell to 5.7% mostly due to a drop in labor force participation. Canadian inflation and consumer spending reports are due today. Headline CPI could rise 0.4% while core CPI is expected to post a 0.1% uptick. Headline retail sales could show a 0.7% drop while core retail sales could indicate a 0.4% decline.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (May 23, 2016)

USD

The US dollar stalled from its rallies earlier in the week, as traders likely lightened up on their holdings ahead of the weekend. There were no major reports out of the US economy then while today has the flash manufacturing PMI on tap. Analysts are expecting to see a climb from 50.8 to 51.0 to show a faster pace of industry expansion.

EUR

The euro managed to hold on to some of its recent gains as data from the region came in mixed. German PPI posted a 0.1% uptick in producer prices versus the projected 0.2% increase while the current account surplus widened to 27.3 billion EUR. Flash manufacturing and services PMI readings from Germany and France are lined up today and improvements are eyed, likely enough to support the shared currency.

GBP

The pound was one of the biggest losers on Friday, as the UK currency gave up ground on Brexit speculations and short-covering. UK data was stronger than expected, as the CBI industrial order expectations index rose from -11 to -8 instead of falling to -13. There are no major reports due from the UK today.

CHF

The franc was able to recover against most of its peers when traders booked profits off their previous short positions. There were no reports released from the Swiss economy then and none are due today, although the franc could be pushed around by euro zone data.

JPY

The yen chalked up gains across the board when rumors of the BOJ gearing up to end its quantitative easing program hit the airwaves. Traders also booked profits off their earlier short positions ahead of the G7 Summit over the weekend, as leaders discussed how competitive devaluation should be avoided. Japan's flash manufacturing PMI and all industries index are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker as crude oil returned some of its recent gains and Canada's reports showed mixed results. Headline retail sales showed a larger than expected 1.0% drop while core retail sales printed a smaller than expected 0.3% dip. Headline CPI rose 0.3% while core CPI showed a stronger than expected 0.2% uptick. Canadian banks are closed for the holiday today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 24, 2015)

USD

The US dollar had a mixed performance as it reacted mostly to country-specific events. Data from the US was weaker than expected, as the flash manufacturing PMI slid from 50.8 to 50.5 instead of improving to the projected 51.0 reading, but Fed officials reiterated that 2-3 rate hikes are still possible for the year. Only the US new home sales report is due today and a rise from 511K to 521K is eyed.

EUR

The euro retreated to the lower-yielding currencies when PMI readings came in mixed. The manufacturing sector looked mostly weaker while the services sector posted gains. The German and euro zone ZEW economic sentiment figures are up for release today and the former is expected to rise from 11.2 to 12.1 while the latter could climb from 21.5 to 23.4.

GBP

The pound gave up more of its recent wins when the UK Treasury warned of the repercussions of a Brexit. Still, opinion polls are showing a larger lead in favor of those voting to stay in the EU. BOE Inflation Report hearings are scheduled today but unless there are any major changes to rhetoric, traders could keep taking their cues from Brexit-related updates.

CHF

The franc took advantage of the run in risk aversion yesterday, as traders flocked away from the euro towards the Swiss currency. The Swiss trade balance is due today and a wider surplus of 3.14B CHF from the earlier 2.16B CHF is projected.

JPY

The yen was also a big beneficiary from the risk-off flows, especially since Finance Minister Aso appeared to be in agreement with the rest of the G7 leaders in avoiding competitive FX devaluation. Data from Japan was weaker than expected, though, as the flash manufacturing PMI slid from 48.2 to 47.6 while the all industries index printed a meager 0.1% uptick instead of the estimated 0.7% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were barely able to recover since risk-off flows were seen yesterday. Earlier today, RBA head Stevens emphasized their focus on inflation-targeting, reminding traders that they could lower rates again if necessary. New Zealand's trade balance is due next and a smaller surplus of 25 million NZD from the earlier 117 million NZD is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 25, 2015)

USD

The US dollar returned some of its recent gains to the higher-yielding currencies when risk appetite improved. Data from the US came in mixed, with the new home sales report showing a rise from 531K to 619K and the Richmond manufacturing index falling from 14 to -1, indicating industry contraction. Only the flash services PMI is due from the US today and a climb from 52.8 to 53.1 is expected.

EUR

The euro tumbled against most of its counterparts when the German ZEW economic sentiment index slipped from 11.2 to 6.4 instead of improving to 12.1. The region's index fell from 21.5 to 16.8 instead of rising to 23.4. The German Ifo business climate index is due today and a rise from 106.6 to 106.9 is eyed, although another downbeat results could spur more euro losses.

GBP

The pound resumed its climb in recent trading sessions, as anti-Brexit remarks might convince more voters to favor staying in the EU. Opinion polls are still showing a tight race between the "stay" and "leave" votes but BOE Governor Carney did emphasize the repercussions of a Brexit during the BOE Inflation Report hearings. There are no major reports lined up from the UK today.

CHF

The franc gave up ground to most of its rivals when risk appetite returned to the markets. There were no reports out of Switzerland then so the franc was also weighed down by weak euro zone data. The Swiss UBS consumption indicator and ZEW economic expectations index are due today, with improvements likely to help the franc regain ground.

JPY

The yen was off to a strong start in the earlier sessions but soon gave up its lead when risk appetite improved. There were no reports out of the Japanese economy then but rumors of central bank intervention and a delay in the sales tax hike weighed on the currency. There are still no reports due from Japan today, keeping market sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls got pummeled in earlier sessions but soon recovered against the lower-yielding currencies. RBA Governor Stevens stressed their focus on inflation-targeting, hinting that more rate cuts could be possible. Meanwhile, the API reported a drop in crude oil inventories, driving the commodity price higher. New Zealand's trade surplus was wider than expected at 292M NZD as exports rose. The BOC decision is up next and no change from the 0.50% benchmark rate is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 26, 2015)

USD

The US dollar gave up some of its recent gains when risk appetite improved in recent trading sessions. Data from the US economy was weaker than expected yesterday, as the flash services PMI fell from 52.8 to 51.2 instead of improving to the projected 53.1 figure. US durable goods orders data is due today, with the headline and core figures expected to post 0.3% gains. Initial jobless claims data is also due and a 275K reading is expected.

EUR

The euro had a mixed performance as it recovered to the dollar but lost ground to the yen, pound, and comdolls. Data from the euro zone came in stronger than expected, as the German Ifo business climate index rose from 106.7 to 107.7 versus expectations at 106.9. Only the Italian retail sales report is due today.

GBP

The pound chalked up yet another winning day as the lack of top-tier data left traders focused on Brexit updates. For today, the second GDP estimate is due and no changes from the 0.4% initial figure is eyed. Preliminary business investment data is also due and a 3.2% rebound is eyed.

CHF

The franc was mostly weaker against its peers, despite improvements in Swiss data. The UBS consumption indicator climbed from 1.40 to 1.47 while the ZEW economic expectations index rose from 11.5 to 17.5. There are no reports due from the Swiss economy today.

JPY

The yen resumed its climb in the late US session and early Asian session but appears to be losing ground again. There are no economic reports lined up from Japan today so risk sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar recovered against its peers when the BOC refrained from cutting interest rates. In fact, the Canadian central bank gave a relatively neutral statement even as the economy is facing plenty of challenges. Earlier today, Australia reported a 5.2% slump in private capital expenditure for the first quarter, reminding traders that another RBA cut could be possible. New Zealand is set to print its annual budget today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 27, 2015)

USD

The US dollar returned some of its recent wins despite stronger than expected economic releases. Headline durable goods orders jumped 3.4% versus the projected 0.3% uptick while core durable goods orders beat expectations with a 0.4% increase. Initial jobless claims and pending home sales also came in better than expected but traders appear to be booking profits ahead of today's preliminary Q1 GDP reading and Fed Chairperson Yellen's speech.

EUR

The euro recovered against some of its forex peers bur remained weak against the commodity currencies. There were no major reports out of the euro zone yesterday and none are due today, which suggests that the shared currency could move to the tune of risk sentiment.

GBP

The pound was mostly stronger in the earlier trading sessions but soon retreated on weak data releases. While the second GDP estimate featured no changes, the preliminary business investment report showed a 0.5% drop instead of the estimated 3.2% gain while BBA mortgage approvals fell short of estimates.

CHF

The franc was still stuck in consolidation to the dollar as there were no major reports out of the Swiss economy recently. There are still no reports due today so the franc might simply trail the euro or react to overall market sentiment, regaining ground on a return in risk appetite.

JPY

The yen had another volatile run, as the currency reacted mostly to sentiment and weak inflation data. Tokyo core CPI showed a 0.5% decline in price levels versus the projected 0.4% drop and the previous 0.3% drop. The national core CPI printed a 0.3% decline, slightly better than the projected 0.4% decrease.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the return in risk appetite to erase some of its recent losses while the Loonie kept capitalizing on the BOC's decision to keep rates unchanged. However, the higher-yielders returned some of their recent wins when crude oil retreated sharply from the $50/barrel level. In Australia, private capital expenditure slumped 5.2% in the first quarter versus the projected 3.2% decline.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 30, 2016)

USD

The US dollar regained ground against its peers when Fed Chairperson Yellen didn't sound too cautious in her testimony last Friday. She confirmed that a rate hike would probably be appropriate in the coming months, acknowledging that the US economy continues to recover and that the labor market has made a lot of progress. However, she also cautioned that wage and productivity growth are weak. The US GDP was upgraded from 0.5% to 0.8% as expected but the UoM consumer sentiment index was downgraded from 95.8 to 94.7. US banks are closed for Memorial Day today.

EUR

The euro sold off sharply to the dollar but recovered to the yen on Friday. There were no reports released from the euro zone then while today has German import prices, preliminary CPI, and Spanish flash CPI due, providing traders an idea of how the region's CPI estimates might turn out.

GBP

The pound retreated to the dollar but scored more gains against its other counterparts. There were no reports out of the UK economy then while banks are closed for the holiday today.

CHF

The franc broke out of its consolidation to the dollar and chalked up losses, as there were no reports to support the Swiss currency on Friday. The Swiss KOF economic barometer is due today and a rise from 102.7 to 102.9 is eyed, likely providing the currency a bit of support.

JPY

The yen gave up ground across the board on Friday, as traders dumped the yen in favor of the safe-haven dollar after Yellen's testimony. The BOJ core CPI was weaker than expected a 0.9% versus the projected 1.0% reading. Over the weekend, Japan reported a 0.8% decline in April retail sales versus the estimated 1.2% drop. Japanese household spending, industrial production, and jobless rate are due in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their declines to the dollar but managed to hold on to their wins against the yen. Earlier today, Australia reported a 4.7% drop in HIA new home sales and a 4.7% decline in quarterly company operating profits. New Zealand building consents data is due next.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (May 31, 2016)

USD

The US dollar returned some of its recent gains as the absence of US traders on their Memorial Day holiday left the US session as a profit-taking opportunity. There were no reports released from the US economy then while today has the CB consumer confidence and Chicago PMI on tap. The consumer confidence index is slated to rise from 94.2 to 96.1 while the manufacturing index could climb from 50.4 to 50.8.

EUR

The euro chalked up strong gains against the dollar and the yen but retreated to the commodity currencies when risk appetite appeared to improve. Euro zone data came in mostly weaker than expected, with German import prices falling by 0.1% instead of rising by the estimated 0.4% figure and French consumer spending also sliding lower. German retail sales and unemployment change, along with the French preliminary CPI, are up for release today and another batch of weak readings could mean more declines for the shared currency. Euro zone flash CPI estimates are also lined up.

GBP

The pound managed to stay afloat and extend its gains to the dollar, yen, and euro. There were no reports out of the UK economy yesterday as banks were closed for the holiday and there are still no reports lined up today, allowing traders to react to Brexit polls and price in their expectations for the PMI readings due later on.

CHF

The franc struggled to recover against some of its forex counterparts even as the KOF economic barometer climbed from 102.6 to 102.9 as expected. There are no reports lined up from the Swiss economy today so the franc might take its cue from the euro zone data lined up.

JPY

The yen lost a lot of ground against its peers when more cabinet members confirmed PM Abe's plans to delay the consumption tax hike from April 2017 to October 2019, putting the government at risk of a credit rating downgrade. Data from Japan was stronger than expected, as household spending fell 0.4% instead of the estimated 1.3% decline while preliminary industrial production rebounded by 0.3%.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got a strong boost from a 3.0% rebound in building approvals when analysts had been expecting a 3.1% decline. Private sector credit came in line with expectations of a 0.5% increase but the current account deficit was wider than expected. Canadian GDP is due next and a 0.1% contraction for March is eyed.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (Jun 01, 2016)

USD

The US dollar had a mixed performance as it advanced to comdolls and European currencies but lost ground to the yen. Data from the US economy came in mixed, with personal spending beating expectations with its 1.0% gain and personal income coming in line with consensus at 0.4%. The Chicago PMI fell into industry contraction instead of showing an improvement from 50.4 to 50.8 while the CB consumer confidence index also fell short of estimates. US ISM manufacturing PMI is due today and a drop from 50.8 to 50.5 is eyed.

EUR

The euro had a volatile run as euro zone data came in mixed. German retail sales fell 0.9% instead of showing the projected 1.0% gain but unemployment fell by 11K versus the projected 4K drop. French preliminary CPI beat expectations with a 0.4% increase while euro zone flash CPI estimates came in line with expectations of a 0.1% decline in the headline figure and a 0.8% increase for the core figure. Final manufacturing PMI readings are due from the top euro zone economies today.

GBP

The pound suffered a sharp selloff against its forex rivals when Brexit polls suggested that public opinion was starting to shift in favor of leaving the EU. There were no reports released from the UK economy then while today has the UK manufacturing PMI on tap. A rise from 49.2 to 49.6 is eyed, but traders could pay more attention to Brexit-related updates.

CHF

The franc was able to take advantage of the risk-off vibes in the European markets, as it advanced mostly against the pound. There were no reports out of the Swiss economy then while today has the quarterly GDP due. Analysts are expecting to see a 0.3% uptick, slower compared to the earlier 0.4% growth figure.

JPY

The yen regained ground against its peers when risk aversion peeked back in the financial markets. Housing starts data from Japan came in stronger than expected with a 9.0% gain versus the projected 3.9% increase. The final manufacturing PMI is due today and no change from the initially reported 47.6 figure is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie gave up ground to its peers when the Canadian March GDP missed expectations. The economy contracted 0.2% versus the projected 0.1% decline in growth, bringing the quarterly GDP to 2.4% versus estimates at 2.9%. Chinese official manufacturing PMI was unchanged at 50.1 instead of dropping to 50.0 while the non-manufacturing PMI fell from 53.5 to 53.1. Australian GDP is due next and a 0.6% growth figure is eyed.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (June 02, 2016)

USD

The US dollar gave up some ground despite mixed data, as traders focused on the 1.8% slump in construction spending. The Fed's Beige Book confirmed that most districts saw improvements, underscoring a potentially upbeat FOMC statement later this month. The ISM manufacturing PMI beat expectations as it rose from 50.8 to 51.3 instead of falling to 50.5. The ADP non-farm employment change report is due today and a 174K gain in hiring is eyed.

EUR

The euro regained ground against some of its rivals, possibly as traders booked profits ahead of the ECB statement. Data from the euro zone was also mostly weaker than expected as some final manufacturing PMI readings were downgraded. The ECB statement is lined up today but no actual policy changes are expected, although dovish remarks could extend the shared currency's slide.

GBP

The pound chalked up yet another losing day as more polls indicated a lead in favor of those voting to exit the EU. Data from the UK was stronger than expected, as the manufacturing PMI rose from 49.4 to 50.1, indicating a return to industry expansion. The construction PMI is due today and a dip from 52.0 to 51.9 is eyed.

CHF

The franc was slightly weaker against most of its peers due to lower than expected Swiss retail sales. The report showed a 1.9% year-over-year drop versus the estimated 0.8% slide. There are no reports due from Switzerland today, leaving the franc sensitive to market sentiment and euro zone events.

JPY

The yen raked in a lot of gains when PM Abe made the official announcement to delay the sales tax hike. This could keep consumer spending and price levels propped up for a few more years but prevent the government from achieving its fiscal targets sooner. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was one of the strongest performing currencies lately, thanks to a 3.8% increase in the dairy price index in the latest GDT auction. Earlier on, Australia printed a weaker than expected 0.2% uptick in retail sales but also showed a smaller than expected deficit buoyed by a 1% increase in exports. The OPEC meetings are going on today and any decision (or lack thereof) could have a material impact on Loonie action.

By Kate Curtis from Trader's Way